Struggling British pig industry calls for Tesco to step up

By James Davey

LONDON (Reuters) -The trade body for Britain’s pig industry on Thursday told Tesco, the country’s biggest supermarket group, it needs to do more to support struggling producers or risk losing its UK pork supply base.

In an open letter to Tesco Chief Executive Ken Murphy, the chairman of the National Pig Association (NPA), Rob Mutimer, said the retailer, given its scale, was uniquely positioned to act to prevent the “destruction of the UK pig sector”.

Mutimer said UK pork producers were currently facing unprecedented losses as costs of production soar due to record pig feed prices on the back of higher wheat prices caused by the war in Ukraine.

He noted it currently costs 203 pence to 216 pence per kg to produce a pig, but average pig prices remain below 170 pence a kg, meaning many producers are losing tens of thousands of pounds each week.

He said Tesco’s smaller rivals – Sainsbury’s, Asda, Morrisons, Aldi, the Co-op, Marks & Spencer and Waitrose – were paying their suppliers more for British pork. However, he said Tesco, which has an over 27% share of Britain’s grocery market, needed to do more.

“Unless action is taken now and a fair price is paid, there will not be a domestic pig industry left to service the demands of your shoppers,” Mutimer told Murphy.

In response, Tesco said it recognised the seriousness of the situation UK pig farmers were facing and has been working closely with its suppliers to understand what more it can do to support the sector.

“Through the buying models we already have in place, our suppliers have increased payments to farmers by 3.4 million pounds ($4.2 million) since March 2022,” said a Tesco spokesperson.

“However we would like to do more and are actively working with our suppliers on a further enhanced payment plan to support farmers in the short term.”

Last month, Tesco reported a 36% jump in profit for 2021-22 but warned of a drop this financial year as surging inflation piles pressure on the supermarket group and its customers alike.

($1 = 0.8087 pounds)

(Reporting by James Davey; Editing by Marguerita Choy and Richard Pullin)